2% tax is going nowhere, Mthuli Ncube

Zim Now Writer

Finance and Economic Development Minister Mthuli Ncube has said the 2 percent intermediated money transfer tax is going to stay.

This comes as Members of Parliament called on the Treasury boss to reduce or do away with it while local authorities complained that the IMTT tax erodes their revenue bases and pleaded for exemption.

Harare East legislator Tendai Biti (CCC) last week in the National Assembly called for the scrapping of the tax, arguing that it was punishing the poor.

“We do not need that IMTT tax. We are one of the few countries in the Sub-Saharan African region that has that tax. The IMTT punishes the small person who goes into a bank; it does not punish the rich person at the ATM. So why are you punishing the poor?” Biti said.

Ncube, however was adamant that government could not afford to reduce its revenue streams.

“The IMTT tax has over the past years generated substantial resources that have enabled government to support various infrastructure projects, including responding to shocks such as Covid-19 and other climate shocks that the economy has experienced. The proposal to exempt local authorities will erode our revenue base, but besides, these local authorities at that level are also benefiting from the devolution budget to deal with infrastructure developments at that local level.”

Ncube said IMTT was helping to tax the informal sector and claimed that the tax was promoting social inclusion.